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The Principles of Success

Someone once asked my wife, Margie, what she thought leadership was all about. She nailed it when she said, “Leadership is love. It’s not about love.” It’s loving your mission, loving your customers, loving your people and loving yourself enough to get out of the way so other people can be magnifi cent. That can only happen when you have your priorities in order.”

Next year, as we celebrate the 30th anniversary of the Ken Blanchard Companies®, Margie and I feel blessed that we have been able to keep our priorities in order. Our son and daughter, their spouses and Margie’s brother all play major roles in our company, which has grown to more than 300 employees. We feel fortunate to have been in business these three decades. And we credit that longevity to an adherence to four principles involving Passion, Profits, People and Priorities.

Recently, I teamed up with successful entrepreneurs Don Hutson and Ethan Willis to write The One Minute Entrepreneur®. The essence of what we teach in the book comes down to these four principles or P’s that aspiring entrepreneurs need to follow if they are to be successful.

Passion

The first P stands for Passion—what my mentor, Sheldon Bowles, calls “The Test of Joy.” If you don’t love what you’re doing, you’ll never work hard enough to be the best. How can you tell what brings you joy? Anything you do that, while you’re doing it, causes you to lose track of time. When Margie and I started our company, it was purely a training and development operation, and we loved it because we loved to teach. If you don’t love doing the essence of what your business will entail, then forget it. You’ll never be truly successful.

Profits

Sometimes making money has to be more important than having fun. The second P stands for Profits. Here you have to pass the second test that Sheldon Bowles calls “The Test of Purpose.” If you can’t find somebody to pay you to have fun, then you have a hobby, not a business. Many entrepreneurs fail because they forget the most basic business tenet: Sales have to exceed expenses. Don’t get a fancy office or have fancy stationery and business cards until you have some customers.

When it comes to increasing profit, most people focus on cutting costs. While managing expenses is important, it is a negative energy drain. Positive energy is generated when you creatively think of new ways to increase your revenue. When Margie and I started our company, the only way we made money was for our bodies to show up in front of corporate classrooms. After a while, we realized that our bodies could get tired. We started fantasizing about how we could make money while we slept. That’s when we started to develop learning materials we could sell as part of our seminars and to other trainers who wanted to share our learning. We followed that by offering audio and videotapes. Then came the
phenomenal success of The One Minute Manager®, a book I wrote with Spencer Johnson, which led to the publication of dozens of books and many millions of book sales.

A third key element here is that you have to collect your bills. Many a company has gotten into financial trouble because they haven’t collected their receivables. One of the biggest reasons entrepreneurial companies go out of business is they don’t know how to manage finances. Yet making a profi t is not the only reason to be in business. For
a long time, I have said that profi t is the applause you get for taking care of your customers and creating a motivating environment for your people. Profit is a byproduct of doing a good job with the third P, People.

People

How well you deal with people—your customers and your associates—depends on whether you pass Sheldon Bowles’ “Test of Perpetual Prosperity.” That means you will never be successful in business if you don’t serve and help other people. If your business is all about you, it will eventually come back and bite you. The most successful entrepreneurs I know realize that business is more about what they give than what they get. It’s about serving rather than being served. Successful entrepreneurship requires that you become a servant leader.

Skeptics of “servant leadership” contend the words servant and leader don’t go together. How can you lead and serve? People who think that way don’t understand that there are two parts to servant leadership:
A visionary role, setting the course and the destination, which often is referred to as strategic leadership.
An implementation role, doing things right with a focus on serving, which is often referred to as operational leadership.

Some people think leadership is about vision and strategy, while management is about implementation and operations. I prefer not to distinguish between the two. I consider both roles to be servant leadership roles, and both are necessary to be an effective entrepreneur.

Strategic leadership and operational leadership are two sides of the same coin—each vitally important. Entrepreneurs must lead by setting the course and direction, and then they need to flip the coin and serve by empowering and supporting others in implementation.

Leadership is about going somewhere. Effective leadership begins with a compelling vision. A compelling vision tells people specifically what business they are in, where they are going and the values that will guide their journey. As an entrepreneurial leader, once your vision is set, you can then establish goals to answer the question: What do you want people to focus on now? If you cut your people loose without any direction or guidelines, they’ll lose their way and
your organization will suffer.

The traditional pyramid hierarchy is effective for this first role of leadership—the strategic visionary/direction role. People will look to the entrepreneur for vision and direction. While it is important to involve experienced people in shaping the direction, the ultimate responsibility for establishing a compelling vision and clear goals
remains with the leader and cannot be delegated to others.

Once people have a picture of where you want to take them and why, the entrepreneurial leader switches to the second role of leadership—operations, or implementation. Now the traditional pyramid hierarchy must be turned upside down so the frontline people who are closest to the customers are at the top, where they can be responsible-able to respond—to their customers. In this scenario, leaders serve and are responsible to the needs of their people. If a leader does not respond to the needs and desires of his or her people, these folks will not take care of their customers. But when the frontline customercontact people are treated as responsible owners of the vision, they can soar like eagles rather than quack like ducks. They can create raving fan customers.

In a study by Drea Zigarmi and Scott Blanchard on the leadership profit chain, they found that while strategic leadership—the leadership aspect of servant leadership—gets things started, what really has the greatest impact on organizational success is operational leadership, or the servant aspect of leadership. Why? Because what your people see on a day-to-day basis is the operational leadership. And if they are treated in a way that they can bring their brains to work, and at a minimum psychologically own the company, they become passionate and go out of their way to serve your customers. Passionate employees create devoted customers who then start to brag about you and tell stories about you. The interaction between employee passion and customer devotion really makes entrepreneurial organizations successful. When you serve others, you pass the test of perpetual prosperity and can change the second P from Profits to Prosperity. Everyone wins.

Priorities

Because successful entrepreneurs love what they do and are passionate about their work, they can lose perspective. When that happens, they start thinking that the success of their entrepreneurial operation is what life is all about. They start to think that their self-worth is a function of their performance plus the opinions of others. They score themselves on the amount of money they accumulate, the recognition they get for their efforts, and the power and status they obtain. There is nothing inherently wrong with making good money, being recognized for your efforts, or gaining some power and status. What’s wrong is when you think that’s who you are. What you’ll miss in life is signifi cance.

What’s the opposite of accumulation of wealth? It’s generosity. I wrote a book with Truett Cathy, the founder of Chick-fil-A, that defines generosity as sharing your time, talent, treasure and touch with others. What’s the opposite of recognition? It’s service. What’s the opposite of power and status? loving relationships.

I’ll never forget being on a program with Tom Landry, the legendary coach of the Dallas Cowboys. Someone asked him, “Coach, how do you stay calm in the midst of this crazy game called football?” He was quick to respond. “It’s easy because I have my priorities in order. First comes my God, second comes my wife, third comes my kids and fourth comes my job. I know if I lose a football game on Sunday, I have a lot left over.”

Unfortunately, too many entrepreneurs, after they get some successes under their belt, start thinking that a profitable bottom line is the most important thing in life. If you keep your priorities in order, you can have it all and be a successful entrepreneur. If you don’t, and you lose perspective, you can win the battle and create a profitable organization but lose the war and separate yourself from your faith, your family and your friends. It’s not worth that wrong choice.

In his book, When the Game Is Over, It All Goes Back in the Box, John Ortberg tells a story about his grandmother, who was an incredible Monopoly player. When he played with her when he was a youngster, she always won. At the end of the game, she had everything—Broadway, Park Place—and he had nothing. She would get a grin on her face and say, “John, someday you’re going to learn how to play the game.”

The summer when he was about 13, a kid moved next door who was an incredible Monopoly player. John practiced with him every day because he knew in September his grandmother was coming for a visit. When his grandmother arrived, he ran into the house, gave her a hug and a kiss, and said to her, “Grandma, how about a Monopoly game?”

Her eyes lit up and she said, “Let’s go, John.” But this time he was ready for her. He came out of the chute and wiped his grandmother out. At the end of the game, he had everything and she had nothing. His grandmother smiled and said, “John, now that you know how to play the game, let me teach you a lesson about life. It all goes back in the box!” “What do you mean?” John asked. “Everything you’ve bought and accumulated goes back in the box,” she answered.

Isn’t that the way it is in life? You can push and shove to accumulate wealth, get recognition, and gain power and status, but at the end of life, it all goes back in the box. All you get to save is your soul. That’s all about who you love and who loves you.